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FDIC Enforcement Decisions and Orders

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   [10,045] In the Matter of Progressive Bank and Trust Company, Houma, Louisiana, Docket No. FDIC-90-15d (2-12-90).

   Bank ordered to enhance and augment its primary capital.

   [.1] Capital Directive—Enhance Primary Capital
In the Matter of

PROGRESSIVE BANK AND TRUST COMPANY
HOUMA, LOUISIANA
(Insured State Nonmember Bank)
CAPITAL DIRECTIVE ISSUED PURSUANT TO 12 U.S.C. §3907

   Progressive Bank and Trust Company, Houma, Louisiana ("Bank"), having been advised of its right to receive a NOTICE OF INTENT TO ISSUE DIRECTIVE TO RESTORE AND MAINTAIN CAPITAL (""CAPITAL DIRECTIVE) detailing the unsafe or unsound banking practices alleged to have been committed by the Bank and its right to file a response thereto, under sections 325.4 and 325.6 of the FDIC Rules and Regulations, 12 C.F.R. §§325.4 and 325.6, and having waived those rights, entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CAPITAL DIRECTIVE (""CONSENT AGREEMENT") with counsel for the Federal Deposit Insurance Corporation ("FDIC"), dated January 25, 1990, whereby solely for the purpose of this proceeding and without admitting or denying the alleged charges of unsafe or unsound banking practices, the Bank consented to the issuance of a CAPITAL DIRECTIVE ISSUED PURSUANT TO 12 U.S.C. §3907 (""CAPITAL DIRECTIVE").
   The FDIC considered the matter and determined that Progressive Bank and Trust Company, Houma, Louisiana ("Bank"), had engaged in unsafe or unsound banking practices, as defined at section 325.4 of the FDIC Rules and Regulations, 12 C.F.R. §325.4, by virtue of the fact that as of August 18, 1989, the Bank had a ratio of total capital to total assets, as those terms are defined in section 325.2 of the FDIC Rules and Regulations, 12 C.F.R. §325.2, of 6.09 percent, and a ratio of primary capital to total assets, as those terms are defined in section 325.2 of the FDIC Rules and Regulations, 12 C.F.R. §325.2, of 6.09 percent. The FDIC hereby issues this CAPITAL DIRECTIVE pursuant to the provisions of section 908 of the International Lending Supervision Act of 1983, 12 U.S.C. §3907, and section 325.6 of the FDIC Rules and Regulations, 12 C.F.R. §325.6
   The FDIC finds and concludes as follows:
FINDINGS OF FACT AND CONCLUSIONS OF LAW
   1. The Bank is a corporation existing and doing business under the laws of the State of Louisiana, having its principal place of business in Houma, Louisiana. The Bank is and has been, at all times pertinent to this action, an insured State nonmember bank, subject to the Federal Deposit Insurance Act ("Act"), 12 U.S.C. §§1811-1831k, the Rules and Regulations of the FDIC, 12 C.F.R. Chapter III, the International Lending Supervision Act of 1983, 12 U.S.C. §§3901-3912, and the laws of the State of Louisiana.
   2. As of August 18, 1989:
   (a) The Bank's total assets, as defined in section 325.2(k) of the FDIC Rules and Regulations, 12 C.F.R. §325.2(k), totaled $93,508,000.
   (b) The Bank's total capital, as defined in section 325.2(k) of the FDIC Rules and Regulations, 12 C.F.R. §325.2(l), totaled $5,691,000, or 6.09 percent of total assets.
   (c) The Bank's primary capital, as defined in section 325.2(h) of the FDIC Rules and Regulations, 12 C.F.R. §325.2(h), totaled $5,691,000, or 6.09 percent of total assets.
   (d) The Bank's total deposits totaled $87,097,000.
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   3. The Bank is engaging in an unsafe or unsound banking practice within the meaning of section 325.4(b) of the FDIC Rules and Regulations, 12 C.F.R. §325.4(b), in that the Bank is operating with inadequate capital to support the quantity and quality of the assets in its portfolio, as demonstrated by the following data as of August 18, 1989:
   (a) The Bank held adversely classified assets in the amount of $7,818,000, including $160,000 in assets classified "Loss" and $7,658,000 in assets classified as "Substandard."
   (b) Total classified assets represented 133.62 percent of the Bank's total equity capital and reserves of $5,851,000.
   (c) Nonaccrual loans equaled $2,412,000, and represented 4.1 percent of the Bank's total loans.
   4. Upon consideration of the facts recited in the paragraph above, the FDIC has determined that the Bank has failed to maintain adequate capital, as required by section 908 of the International Lending Supervision Act of 1983, 12 U.S.C. §3907, and sections 325.3 and 325.4 of the FDIC Rules and Regulations, 12 C.F.R. §§325.3 and 325.4
CAPITAL DIRECTIVE
   After taking into consideration the FINDINGS OF FACT AND CONCLUSIONS OF LAW stated herein, it is hereby:

   [.1] DIRECTED, that the Bank shall enhance and augment its primary capital by not less than $750,000.
   FURTHER DIRECTED, that the Bank shall complete the required capital augmentation by June 30, 1990.
   FURTHER DIRECTED, that this CAPITAL DIRECTIVE shall become effective ten (10) days after its issuance by the FDIC.
   Each provision of this CAPITAL DIRECTIVE shall be binding upon the Bank, its directors, officers, employees, agents, successors, assigns, and other institution-affiliated parties of the Bank.
   Each provision of this CAPITAL DIRECTIVE shall remain effective and enforceable except to the extent that, and until such time as, any provision shall be modified, terminated, suspended, or set aside by the FDIC.
   Pursuant to delegated authority.
   Dated at Memphis, Tennessee, this 12th day of February, 1990.

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